Abu Dhabi’s $828bn sovereign fund to establish financial zone presence

Abu Dhabi’s estimated $828bn sovereign wealth fund is to establish a presence in the emirate’s financial free zone in a move that could be intended to encourage more international firms to open offices there.

The Abu Dhabi Investment Authority (ADIA) is ranked as the world’s third largest sovereign behind China Investment Corporation with $900bn of assets and Norway’s Government Pension Fund with $1,032.69bn, according to Sovereign Wealth Fund Institute.

The company has invested Abu Dhabi’s vast oil wealth on behalf of the government since 1976 and currently has offices off the UAE capital’s Corniche.

Abu Dhabi Financial Market (ADGM) was established in October 2015 to help the emirate diversify its economy.

“ADGM has established itself as a leading international financial centre and an important catalyst for the continued growth of the investment community in Abu Dhabi, the UAE and the wider region,” said ADIA managing director Sheikh Hamed bin Zayed Al Nahyan.

“ADIA is pleased to join an increasing number of significant global institutions that have established a presence at the ADGM and looks forward to contributing to the centre’s continued development.”

The announcement comes following comments from the CEO of state oil giant Abu National Oil Company in February that the company was more likely to engage with financial institutions with a presence in the zone.

Read: UAE’s ADNOC encourages banks to establish Abu Dhabi presence

“We will, as we did in the past couple of years, engage more with the financial sector and one of the criteria we will be evaluating is … have they decided to engage physically in Abu Dhabi Global Market,” ADNOC chief Sultan al-Jaber said at a financial industry conference.

ADGM competes for business with other regional financial centres including the older and larger Dubai International Financial Centre (DIFC).

It currently has 60 regulated financial institutions and 700 companies registered there, an ADGM official told Reuters in February.

This compares to 473 financial firms and 1,853 registered companies in DIFC at the end of last year after a 12 per cent rise.

Read: Dubai’s DIFC attracts 315 new companies in 2017

Abu Dhabi said last month it would combine its second and third largest sovereign funds, Mubadala Investment Group and Abu Dhabi Investment Council.

The two have nearly $250bn in combined assets, according to Sovereign Wealth Fund Institute.

Read: Abu Dhabi to combine sovereign funds creating $250bn behemoth